Mumbai, Oct 15: The government has decided to rescue Air India by infusing additional equity of Rs 5,000 crore provided that the cash strapped national carrier does its bit of cost cutting and generating additional revenues.
Speaking to reporters on Wednesday, Oct 13, Aviation Minister Praful Patel said that the goal was to reduce costs by Rs 3,000 crore annually and generate additional revenue of Rs 2,000 crore.
The government would be infusing additional equity and restructuring of existing high-cost debts, he said, after separate meetings with the Air India management and representatives of staff unions.
Stressing that the government would only step in if Air India drastically cuts costs and generate additional revenues in order to put the carrier on the road to recovery, Patel said that without these steps it would be extremely difficult for the airline to overcome the losses of Rs 7,200 crore it posted last fiscal..
Air India will also be operation more wide-bodied planes on global routes.